So far, Indigo Paints’ IPO has been subscribed 7.38 times. Retail investors have rushed to subscribe to the issue in the largest numbers, bidding 10.39 times of the quota.
Analysts at Credit Suisse have raised their FY21-23E EPS for Asian Paints by 4-14% and target multiple to 62x.
Indigo Paints initial public offering closes today for subscription. The 1,170 crore IPO has received a decent response from investors so far during the bidding process, with all portions being oversubscribed. Today on the last day of subscription, Qualified Institutional Buyers (QIB) are expected to shore up the subscription rate even higher. Along with this, the public issue of Home First Finance has also gotten off to a flying start, with retail investors and QIBs oversubscribing their portions at the end of the first day.
So far, Indigo Paints’ IPO has been subscribed 7.38 times. Retail investors have rushed to subscribe to the issue in the largest numbers, bidding 10.39 times of the quota. Retail investors are followed by Non-Institutional Investors, who have subscribed their portion 5.39 times; while QIBs have bid for 3.85 times their quota. Employees of the decorative paint manufacturer have not let the opportunity slip from their hands, oversubscribing their portion of the issue.
“On a trailing PE basis, Asian Paints, Berger Paints, Kansai Nerolac and AkzoNobel are trading at 116.6x, 150.0x, 93.0x and 62.1x respectively. Whereas, Indigo Paints is priced at 98.4x PE on a trailing basis. So on a trailing PE basis, Indigo Paints valuation is in line with the average of top four paint companies,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking. He added that Indigo Paints is currently trading at a 50-60% premium in the grey market. Analysts at Motilal Oswal have a ‘Subscribe’ rating on the issue with a long-term view. “We like Indigo Paints given its differentiated product portfolio and robust expansion plans. We believe it can attain scale and maintain its strong growth over the next few years,” they added.
Home First IPO oversubscribed
Home First Finance, a technology-driven NBFC in the housing finance segment saw robust demand on the first day of the issue. QIBs have bid for 1.28 times their quota so far while NIIs have bid for just 13% of the shares reserved for them. Retail Investors too have oversubscribed the issue, bidding for 1.29 times their portion. Overall the issue has been subscribed 1.04 times. “The issue is priced at post-money P/BV of 3.4x compared to its nearest competitor Aavas Financiers which trades at 6.8x on September BV,” said analysts at Yes Securities.
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